Several deals done from various regions by Turkish mills show that both buyers and sellers are content with the current price levels, at least for the first round of deep sea scrap purchases done early May.
SteelOrbis has learned that a third ex-US booking is done by an Izmir-based producer for HMS I/II 80:20 scrap at $338/mt CFR, a fourth one is sold to another producer in Izmir with HMS I/II 85:15 scrap at $342.5/mt CFR. Ex-US HMS I/II 80:20 scrap prices have easily settled at $338-339/mt CFR, while new offers from the US are reportedly at $340/mt CFR and above. Market sources state that the margins of US suppliers are more favorable as compared to the European counterparts. “The drop in the local US scrap market has helped US suppliers. Therefore, we hear them selling cargoes one after another,” a scrap supplier commented today, May 9. As SteelOrbis reported late yesterday, US scrap prices for May delivery are expected to settle $20-40/gt ($20-41/mt) less than their April counterparts because of continued reports of plentiful inventory levels at local scrap yards, amid an expectation for reduced May demand from domestic steel producers.
Meanwhile, an ex-UK booking by an Izmir-based producer was closed at $335/mt CFR, while an ex-Netherlands cargo to another Izmir-based mill was sold at $333/mt CFR. “We see a little push from the Europeans, their margins are tight. Their offers are at around $338-340/mt CFR now, very close to what US sellers are asking,” another source reported. The euro-US dollar exchange rate has softened a bit to €1.125 to a dollar today, but the volatility is still impacting the international scrap market. As of today, European export yards’ collection prices are in the range of €255-260/mt DAP. “Remember, exporters were paying €310s/mt DAP not a long ago. Although their collection prices declined towards €230s/mt DAP during April, the tonnages they could get from the lower end were very small. So, their inventory costs have not declined significantly,” a third source from the seller side added. Meanwhile, European local scrap market is moving down as anticipated by SteelOrbis. A major mill in Germany declined prices by €30/mt, and another declined its purchase prices by €40/mt. Sources reported that a major local mill in Poland confirmed a decline of PLN 150/mt (around €35/mt) for May round of purchases, but there are talks about other mills also bidding at PLN 200/mt (€47/mt) lower levels compared to April.
While there are rumors of several available cargoes, mainly from the EU segment and all above $335/mt CFR, not that much of a demand is observed on the Turkish producers’ side. “Some producers concluded deals from the bottom, they are willing to accept some increases in prices, while others do not. Same goes for the sellers, the ones sold at the lower end of the previous round are looking for higher prices to reach a higher average, as others without sales can be happy with the current levels. Market still tries to find some assurance and balance,” a European scrap seller commented. SteelOrbis expects more deals in the current range of $333-340/mt CFR early next week, the upward push to prices is likely to remain weak for now. Unless the local steel segment shows some rebound in prices or recovery in demand, a sharp increase in deep sea segment seems unlikely.
